# Dannica Corporation produces products that it sells for \$40 each. Variable costs per unit are \$25,...  Dannica Corporation produces products that it sells for \$40 each. Variable costs per unit are \$25, and annual fixed costs are \$360,000. Dannica desires to earn an after-tax (post-tax) profit of \$150,000 for the year. The expected income tax rate is 20%. Required: Determine the sales volume in units required to earn the desired after-tax profit. Multiple Choice 30,180 Units 28,922 Units 34,000 Units NR NA
The marketing manager of Benson Corporation has determined that a market exists for a telephone with a sales price of \$22 per unit . The production manager estimates the annual fixed costs of producing between 40,200 and 81300 telephones would be \$532,600. Required Assume that Benson desires to earn a \$131,000 profit from the phone sales. How much can Benson afford to spend on variable cost per unit if production and sales equal 47,400 phones? Variable cost per un

1. units required to earn a desired profit = fixed cost + desired amount of profit

contribution per unit

contribution per unit is not given, therefore,

contribution = selling price - variable cost per unit

= 40-25 = 15

units required = 360,000+150,000 / 15

= 510,000/15

= 34,000 units.

2. as per the question,

units= 47,400 fixed cost = 532600, (because the units produced is between 40,200 and 81,300.)

desired profit = 131,000 variable cost = as it is not given, assume as V

price = 22

we know that,

units required to earn desired profit = fixed cost + desired profit / contribution per unit

contribution = selling price - variable cost

= 22 - V.

substituting in above formula gives,

47,400 = 532,600 + 131,000 /22-V

47,400 = 663,600 / 22-V

47,400 (22- V) = 663,600

22-V = 663,600 / 47400

22-V = 14

V = 22-14

Variable cost = 8.

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